Published December 2001

SBA offers loan program in response to terrorist attacks

Herald Business Journal Staff

For small businesses that were directly affected by the terrorist attacks on New York City and Washington, D.C., the U.S. Small Business Administration has implemented a program to help.

The Sept. 11 Economic Injury Disaster Loan Program, in effect since Oct. 22, offers financial assistance to small businesses in the form of loans of up to $1.5 million at a 4 percent interest rate and a maximum term of 30 years. Loans of $5,000 or less do not require collateral. Small businesses have until Jan. 21, 2002, to apply.

The loans “are intended only to provide the amount of working capital needed by a small business to pay its necessary operating expenses and obligations until operations return to normal,” the SBA said on its Web site. “The purpose of these loans is not to cover lost income or lost profits, or losses attributable to an economic downturn.”

As part of the application process, small businesses must provide a written explanation of how the attacks on the World Trade Center and the Pentagon or a related federal action have caused economic injury.

Small businesses may be eligible if they:

• Are located in an airport or other facility that was closed or otherwise disrupted due to federal response for national security reasons, or are dependent upon a business or organization that was closed, had its operations suspended or was otherwise disrupted as a result of the terrorist attacks.
• Supplied, provided services to or are otherwise dependent upon a business or industry adversely affected by the destruction of the World Trade Center, damage to the Pentagon or the federal action that followed.

Citing a general decline in business since Sept. 11 is not enough to gain eligibility, said Rick Jenkins of the SBA’s Sacramento office, which is administering the loans to small businesses in Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Nevada, Oregon and Washington.

“But anyone who has been impacted, and they believe it is due to the destruction of the World Trade Center, the Pentagon or federal action ... should call the SBA office and request an application,” he said.

“We have had a lot of phone calls, a lot of interest in the program,” Jenkins said, noting that as of Nov. 8, the administration had sent out about 1,900 applications.

To receive an application, call 800-488-5323. For more information, visit www.sba.gov/disaster/ on the Web.

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